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Are companies run by franchisees small businesses or big
businesses? Seattle's lawmakers and franchisees can't agree – so
they're fighting it out in court.

The International Franchise Association (IFA) filed a preliminary
injunction on Wednesday to block portions of the city's new
minimum-wage law that treat local franchises the same way as
large companies that have over 500 employees.

The IFA argues that by grouping franchisees with large companies
in the rollout of the new law to raise minimum wage to $15 per
hour, Seattle is discriminating against this subset of small
businesses. While most small businesses have seven years to raise
employee pay, franchisees have been forced to raise wages within
three years.

The IFA and five Seattle franchisees filed a lawsuit against the
U.S. District Court in Seattle in June arguing
that certain businesses are being discriminated against due to
their franchised status. However, due to the limited timeframe
for franchisees to prepare for increased labor costs, the IFA
decided to additionally file for an immediate injunction.

"The ordinance is clearly discriminatory and severely hurts
hard-working small business owners who are franchisees," said IFA
president Steve Caldeira in a statement. "This shortcut cannot be
accomplished through a city ordinance and our lawsuit – and now
our motion for preliminary injunction – will provide franchise
small business owners their rightful opportunity to present this
case in court."

Neither the lawsuit nor the injunction attempt to oppose the
aspects of the law that increase minimum wage. Instead, they are
focused solely on how the law will affect franchisees, and the
larger question about how to classify franchises at all.